TABLE 7.2 Calculating a Project Risk Factor 1. Use the project team's consensus to determine the scores for each Probability of Failure category: Maturity (Pm), Complexity (PJ), Dependency (P). 2. Calculate P, by adding the three categories and dividing by 3: P= (Pm + P + P/3
3. Use the project team's consensus to determine the scores for each Consequence of Failure category: Cost (C), Schedule (C), Reliability (C), Performance (Cp). 4. Calculate C, by adding the four categories and dividing by 4: G₁ = (C₁ + C₂ + C + C)/4
5. Calculate Overall Risk Factor for the project by using the formula: RF = P + C (P+)(C₂) Rule of Thumb: Low risk RF <.30
Medium risk RF = .30 to.70
High risk RF>.70
assess 7.15 Quantitative Risk Assessment. Assume the following information for an IT project: Probability of Failure Consequences of Failure Maturity = .7 Cost = 9 Complexity = .7 Schedule = .7
Dependency = .5 Performance = .3
Client Concerns = .5 Future Business = .5
Programmer Skill = .3